Contrasting Cerus (CERS) and Obalon Therapeutics (OBLN)

Cerus (NASDAQ: CERS) and Obalon Therapeutics (NASDAQ:OBLN) are both small-cap healthcare companies, but which is the better business? We will contrast the two companies based on the strength of their profitability, dividends, institutional ownership, valuation, earnings, analyst recommendations and risk.

Earnings & Valuation

This table compares Cerus and Obalon Therapeutics’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Cerus $39.28 million 13.08 -$62.90 million ($0.59) -7.00
Obalon Therapeutics $3.39 million 27.07 -$20.46 million ($1.99) -2.02

Obalon Therapeutics has lower revenue, but higher earnings than Cerus. Cerus is trading at a lower price-to-earnings ratio than Obalon Therapeutics, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Cerus and Obalon Therapeutics’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Cerus -159.35% -142.18% -67.72%
Obalon Therapeutics -459.54% -59.77% -47.02%

Risk & Volatility

Cerus has a beta of 2.22, meaning that its share price is 122% more volatile than the S&P 500. Comparatively, Obalon Therapeutics has a beta of -5.81, meaning that its share price is 681% less volatile than the S&P 500.

Insider and Institutional Ownership

51.5% of Cerus shares are owned by institutional investors. Comparatively, 44.2% of Obalon Therapeutics shares are owned by institutional investors. 7.4% of Cerus shares are owned by company insiders. Comparatively, 16.4% of Obalon Therapeutics shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Cerus and Obalon Therapeutics, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cerus 0 1 4 0 2.80
Obalon Therapeutics 0 1 2 0 2.67

Cerus presently has a consensus target price of $6.20, indicating a potential upside of 50.12%. Obalon Therapeutics has a consensus target price of $10.00, indicating a potential upside of 148.76%. Given Obalon Therapeutics’ higher possible upside, analysts clearly believe Obalon Therapeutics is more favorable than Cerus.

About Cerus

Cerus Corporation is a biomedical products company. The Company is engaged in developing and commercializing the INTERCEPT Blood System for blood safety. The Company operates through blood safety segment. The Company’s INTERCEPT Blood System is based on its technology for controlling biological replication, and is designed to reduce blood-borne pathogens in donated blood components intended for transfusion. The Company’s INTERCEPT Blood System is designed to target and inactivate blood-borne pathogens, such as viruses, including human immunodeficiency virus (HIV), West Nile, Severe acute respiratory syndrome (SARS), hepatitis B and C; bacteria and parasites, as well as harmful white blood cells, while preserving the therapeutic properties of platelet, plasma and red blood cell transfusion products. The Company’s INTERCEPT Blood System is for use with blood components, including plasma, platelets, and red blood cells.

About Obalon Therapeutics

Obalon Therapeutics, Inc. is a United States-based commercial-stage medical device company focused on developing and commercializing medical devices to treat obese and overweight people by facilitating weight loss. The Company’s product, Obalon balloon system, is a swallowable, gas-filled intragastric balloon designed to provide weight loss in obese patients. The Obalon balloon system is intended to be used as an adjunct to a moderate intensity diet and behavior modification program. All balloons must be removed six months after the first balloon is placed. The Obalon balloon system intends to provide patients and physicians with a reversible and repeatable weight loss solution in an outpatient setting, without altering patient anatomy or requiring surgery. The Company has received Premarket approval (PMA) for its Obalon balloon system based on the results of its United States pivotal clinical trial, referred to as the SMART trial.

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